How do you make working capital adjustments in transfer pricing?

July 7, 2024 No Comments

A: Transfer pricing refers to prices that a multinational company or group charges a second party operating in a different tax jurisdiction for goods, services and intangibles. Transfer pricing attempts to assign one of the two parties, also known as the test party, with arm’s

How do you the calculate Sharpe ratio in Excel?

July 7, 2024 No Comments

A: The Sharpe ratio helps investors evaluate the relationship between risk and return for an asset. Since it was introduced by William Sharpe in the 1960s, the Sharpe ratio has become one of the most widely used metrics in finance and economics. By quantifying both

How does a high discount rate affect the economy?

July 7, 2024 No Comments

A: Setting a high discount rate tends to have the effect of raising other interest rates in the economy, since it represents the cost of borrowing money for most major commercial banks and other depository institutions. This could be considered contractionary monetary policy. Exactly how

How did mass production affect the price of consumer goods?

July 7, 2024 No Comments

A: Before the advent of mass production, goods were usually manufactured on a made-to-order basis. Once mass production was developed and perfected, consumer goods could be made for the broadest possible market. Anything consumers needed or desired could be made in larger quantities. Mass production

How do government subsidies help an industry?

July 7, 2024 No Comments

A: Government subsidies help an industry by paying for part of the cost of the production of a good or service by offering tax credits or reimbursements or by paying for part of the cost a consumer would pay to purchase a good or service.

How did mercantilism affect the colonies of Great Britain?

July 7, 2024 No Comments

A: England is small and contains relatively few natural resources. During Great Britain’s mercantilist period, the prevailing economic wisdom suggested that the empire’s many colonies could supply raw materials and resources to the mother country and subsequently be used as export markets for the finished products.

How do I differentiate between micro and macro economics?

July 7, 2024 No Comments

A: Microeconomics is the field of economics that looks at the economic behaviours of individuals, households and companies. Macroeconomics takes a wider view and looks at the economies on a much larger scale – regional, national, continental or even global. Microeconomics and macroeconomics are both

How did moral hazard contribute to the 2008 financial crisis?

July 7, 2024 No Comments

A: The financial crisis of 2008 was the result of numerous market inefficiencies, bad practices and a lack of transparency in the financial sector. Market participants were engaging in behavior that put the financial system on the brink of collapse. Historians will cite products such

How do I invest in the Nasdaq or the NYSE? Is it even possible? Would I want to?

July 7, 2024 No Comments

A: The Nasdaq and the NYSE are stock exchanges that trade securities. Nasdaq stands for National Association of Securities Dealers Automated Quotation and NYSE stands for New York Stock Exchange. (For more information about this topic, read our related article The Tale of Two Exchanges:

How did the Great Recession affect structural unemployment?

July 7, 2024 No Comments

A: The collapse of the housing bubble in 2007 and 2008 caused a deep recession, which sent the unemployment rate to 10.0% in October 2009 – more than double is pre-crisis rate. As of September 2017, the unemployment rate has fallen to below its pre-crisis

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